Supreme Court Update: Luis v. United States (14-419)

April 2, 2016 Supreme Court Update

Greetings, Court Fans!

Here's a line-up you don't see in every (read: any) syllabus: "BREYER, J., announced the judgment of the Court and delivered an opinion, in which ROBERTS, C.J., and GINSBURG and SOTOMAYOR, JJ., joined. THOMAS, J., filed an opinion concurring in the judgment. KENNEDY, J., filed a dissenting opinion, in which ALITO, J., joined. KAGAN, J., filed a dissenting opinion." That was the line-up in Luis v. United States (14-419), a uniquely split decision limiting the Government's power to freeze a criminal defendant's untainted assets before conviction.

Sila Luis was indicted in 2012 for allegedly defrauding the Government of almost $45 million in Medicare funds. Somehow, according to the Government, she had managed to spend almost all of that $45 million. However, she had about $2 million in her possession that was untainted by the fraud. The Government sought to freeze those assets to ensure they remained available to payment of restitution if Luis was convicted at trial. But Luis claimed that she needed the money in order to hire a lawyer. Although the District Court recognized that freezing Luis's assets might prevent her from obtaining counsel of her choice, but held that "there is no Sixth Amendment right to use untainted, substitute assets to hire counsel." The Eleventh Circuit affirmed, but the Supreme Court reversed, (4+1)-3.

Writing for the Chief and Justices Ginsburg and Sotomayor, Justice Breyer concluded that the pretrial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment. While Breyer recognized that the Court's earlier decisions in Caplin & Drysdale v. United States (1989) and Monsanto v. United States (1989) permit the Government to freeze "tainted" assets (meaning "loot, contraband, or property otherwise associated with the planning, implementing, or concealing of a crime"), he concluded that untainted assets are fundamentally different. As a matter of property law, the owner of tainted assets has an imperfect interest in her property, but Luis's interest in her untainted property was perfect. And, while property law allows a person with a future interest in property (like the Government here) may impose conditions on its present use to prevent waste, that interest must be balanced against the defendant's Sixth Amendment right to counsel and, at least where the funds are untainted, the Sixth Amendment trumps. While Breyer recognized that money is fungible, he noted that courts have experience using tracing rules to separate tainted from untainted assets in other contexts, to the line drawn here would be workable in practice.

Justice Thomas provided a fifth vote for the judgment, rejected the plurality's balancing approach and instead based his opinion "strictly on the Sixth Amendment's text and common-law backdrop." At the time the Sixth Amendment was ratified, there was no right to court appointed counsel. The constitutional guaranty was solely that a defendant had a right to hire a lawyer to represent him in a criminal case. In Thomas's view, that right would have been "meaningless" if a defendant could not use his own, untainted money to hire his own lawyer.

Justice Kennedy, joined by Alito, dissented. In his view, the Court had already decided this question in Caplin & Drysdale and Monsanto, cases which "make clear that a defendant has no Sixth Amendment right to spend forfeitable assets (or assets that will be forfeitable) on an attorney." Kennedy rejected the plurality's argument that untainted assets were somehow different because, even if those assets were not directly tied to the defendant's offense, they would be forfeitable upon conviction. The Court's deviation from precedent, Kennedy argued, "rewards criminals who hurry to spend, conceal, or launder stolen property by assuring them that they may use their own funds to pay for an attorney after they have dissipated the proceeds of their crime."

Justice Kagan also dissented based on Monsanto. Unlike Kennedy and Alito, she called Monsanto a "troubling decision" because it allows the Government to freeze, prior to trial, assets that a defendant needs to hire a lawyer "based on nothing more than probable cause to believe that he property will ultimately be proved forfeitable." However, she noted that Luis had not asked the Court to overrule or modify Monsanto and she did not find the plurality's distinction between tainted and untainted assets sufficiently persuasive to warrant a different result here. "[B]ecause Luis takes Monsanto as a given, the Court must do so as well." Whether that's actually true or not, Kagan appears to be inviting a petition from another defendant, who does not take Monsanto as a given, to provide a vehicle for a fresh look at Monsanto.

In the meantime, if you find yourself enriched by a criminal windfall be sure to spend your loot quickly! (Wiggin and Dana would like to remind you that nothing in this email is meant to be construed as legal advice.)